Summary
ONEOK Inc. reported its financial results for the second quarter and first half of 2015. Total revenues decreased by 31% for the quarter and 37% year-to-date, primarily driven by lower commodity sales prices, especially for natural gas and NGLs, which were impacted by a significant decline in WTI crude oil and NYMEX natural gas prices since late 2014. Despite the revenue decline, net income attributable to ONEOK increased by 24% for the quarter, driven by a reduction in net income attributable to noncontrolling interests. However, net income attributable to ONEOK decreased by 11% for the first six months of the year. ONEOK Partners, a significant portion of ONEOK's operations, experienced a decline in net margin for the first six months, largely due to lower commodity prices. However, service revenues increased due to higher natural gas and NGL volumes from recently completed capital projects. The company continues to invest in growth projects, particularly in the Natural Gas Liquids and Natural Gas Pipelines segments, with projects like the Roadrunner Gas Transmission joint venture and WesTex Transmission Pipeline expansion underway to capitalize on increased demand, especially from Mexico. The company maintains a positive outlook on its fee-based businesses and expects continued growth in its operations, albeit at a slower pace than previously anticipated due to market conditions.
Financial Highlights
50 data points| Revenue | $2.13B |
| Cost of Revenue | $1.60B |
| Gross Profit | $524.96M |
| Operating Expenses | $252.34M |
| Operating Income | $272.74M |
| Interest Expense | $102.38M |
| Net Income | $76.50M |
| EPS (Basic) | $0.36 |
| EPS (Diluted) | $0.36 |
| Shares Outstanding (Basic) | 210.20M |
| Shares Outstanding (Diluted) | 210.48M |
Key Highlights
- 1Total revenues decreased significantly in Q2 2015 and YTD 2015 due to lower commodity sales prices, impacted by falling crude oil and natural gas prices.
- 2Net income attributable to ONEOK increased by 24% in Q2 2015 but decreased by 11% YTD 2015, reflecting the impact of lower earnings from ONEOK Partners and changes in noncontrolling interests.
- 3ONEOK Partners is actively expanding its Natural Gas Liquids and Natural Gas Pipelines segments with significant growth projects, including the Roadrunner Gas Transmission joint venture and WesTex Transmission Pipeline expansion.
- 4The company is focused on converting its commodity-based contracts to fee-based contracts or increasing the fee component to mitigate commodity price volatility.
- 5Capital expenditures decreased in the first half of 2015 compared to the same period in 2014, reflecting the completion of major projects in 2014 and a more cautious approach to new investments due to market conditions.
- 6ONEOK Partners has substantial liquidity and access to credit facilities, with credit ratings remaining investment grade despite market pressures.